The  Secured  Debts  Tax  Law 


of  the  State  of  New  York 
AND 


The  Mortgage  Tax  Law 

of  the  State  of  New  York 

(As  Amended  in  1916) 


Guaranty  Trust  Company 
of  New  York 


The  Secured  Debts  Tax  Law 


of  the  State  of  New  York 

and 


The  Mortgage  Tax  Law 


of  the  State  of  New  York 


Guaranty  Trust  Company 
of  New  York 

140  Broadway- 
Fifth  Avenue  Office  London  Office 
Fifth  Ave.  &  43d  Street                                                                         33  Lombard  St.,  E.  C. 


««n 


01 


V 


Copyright,  1916 
Guaranty  Trust  Company  of  New  York 


FOREWORD.     ....   . 

The  Secured  Debts  Tax  Law,  'as  enacted  April  30, 
1915  and  constituting  Article  15,  of  the  Tax  Law,  was 
re-enacted  in  substantially  the  same  form  by  Chapter 
261  of  the  Laws  of  1916,  in  effect  April  21,  1916. 

(1)    Definition  of  "  Secured  Debt." 

(a)  Any  bond,  note  or  debt  secured  by  mortgage 
of  real  property  situated  wholly  without  the 
State  of  New  York. 

(b)  A  proportion  of  the  value  of  a  bond,  note  or 
debt  when  the  security  is  real  property  situated 
both  within  and  without  the  State  of  New 
York. 

(c)  Any  bond  or  note  forming  part  of  a  similar 
series,  secured  by  mortgage  or  deed  of  trust 
of  real  or  personal  property,  or  both,  which 
mortgage  or  deed  of  trust  is  not  recorded  in 
the  State  of  New  York  but  in  some  other 
place. 

(d)  Any  bond  or  note  forming  part  of  a  similar 
series  secured  by  the  deposit  of  valuable  se- 
curities as  collateral  whether  such  collateral 
is  within  or  without  the  State  of  New  York. 

(e)  Bonds,  debentures  or  notes  forming  part  of 
a  similar  series,  which  by  their  terms  are  not 
payable  within  one  year  from  their  date  of  is- 
sue, and  which  are  not  secured  by  deposit  or 
pledge  of  any  collateral  security.  (Sec.  330, 
Page  16.) 


342347 


These  definitions  inch,de  publie  bonds  of  States  other 
than  New  York,  and  obligations  of  foreign  countries 
and  their  political  sub-divisions.  Ordinary  promissory 
notes  can  not  be  made  exempt. 

(2)  What  the  tax  is.  A  special  tax  at  a  fixed  rate 
payable  at  the  option  of  the  holder  in  respect  to  a 
"secured  debt,"  which  exempts  the  "secured  debt"  for 
a  limited  period  from  the  annual  personal  property  tax. 

(3)  The  rate  of  tax.  75c.  per  each  $100.  or  frac- 
tion thereof  of  the  face  value  of  the  "secured  debt." 
(Sec.  331.     Page  17.) 

(4)  Period  of  exemption  secured.  Five  years 
from  the  date  of  the  payment  of  the  tax  (Sec.  331. 
Page  17.) 

(5)  To  obtain  exemption    for  the  year    1916. 

To  obtain  exemption  from  the  personal  property  tax 
for  the  year  1916  in  New  York  City,  the  tax  must  be 
paid  before  assessment  day,  which  is  October  1st. 

(6)  When  the  tax  may  be  paid.  Any  time  prior 
to  January  1,  1917.  After  this  date  "secured  debts" 
may  not  be  made  tax  exempt  without  further  action  by 
the  Legislature.     (Sec.  331.     Page  17.) 

(7)  How  exemption  is  secured.  By  payment  of 
the  tax  to  the  Comptroller  of  the  State  of  New  York 


at  his  office  in  Albany,  or  at  his  branch  office  in  the 
Woolworth  Building,  New  York  City.  Payment  of  the 
tax  is  evidenced  by  stamps  affixed  to  the  "secured  debt/' 
and  cancelled.      (Sec.  331,  332,  333.     Pages  17-18.) 

(8)  The  secured  debt,  itself,  must  be  presented 
and  stamped.  The  Laws  of  1911  and  1915  permitted 
a  description  of  the  secured  debt  to  be  presented  and 
the  tax  paid  thereon.      (Sec.   331,   332,   333.     Pages 

17-18.) 

(9)  Secured  debts  may  be  registered  no  matter 
what  the  denomination.  This  continues  the  provi- 
sion of  the  Law  of  1915.  Under  the  Law  of  1911  they 
could  not  be  registered  if  in  denominations  exceeding 
$1,000. 

(10)  Offset  of  debts.  A  person  holding  a  secured 
debt  as  an  investment,  on  which  the  tax  has  not  been 
paid,  may  not  deduct  his  just  debts  against  the  assessed 
value  of  such  secured  debts. 

Persons  holding  secured  debts,  not  as  investments,  but 
temporarily  in  their  possession  for  sale,  and  actually 
engaged  in  the  purchase  and  sale  of  such  securities  as 
a  business,  and  maintaining  an  office  or  place  of  business 
in  this  State  for  carrying  on  an  actual  bona  fide  business 
of  purchasing  and  selling  such  securities,  as  distin- 
guished from  their  purchase  for  investment,  shall  be  al- 
lowed to  deduct  their  just  debts  from  the  tax  against  the 


5 


assessed  value  of  such  secured  debts,  provided  that  the 
secured  debts  have  not  been  owned  and  held  for  a  longer 
period  than  eight  months.     (Sec.  336.     Page  20.) 

(11)     Exemption  of  secured  debts  upon  which 
tax  has  previously  been  paid. 

(a)  Where  the  tax  has  been  paid  upon  a  secured 
debt  under  the  Law  enacted  September  1, 
1911,  and  prior  to  the  first  day  of  May,  1915, 
such  secured  debt  is  stated  to  be  exempt  from 
personal  property  tax  until  maturity.  (Sec. 
338.     Page  21.) 

(b)  Where  the  tax  has  been  paid  upon  secured 
debts  under  the  Law  effective  April  30,  1915, 
and  between  the  first  day  of  May,  1915,  and 
November  1,  1915,  such  secured  debt  remains 
exempt  from  personal  property  tax  for  a  pe- 
riod of  Five  Years  from  the  date  of  the  pay- 
ment of  the  tax.     (Sec.  339.     Page  21.) 


Note — Section  6  of  Article  1  of  the  Tax  Law  provides  that 
all  personal  property  subject  to  taxation  shall  be  assessed  at 
its  full  value,  but  the  owner  of  personal  property  shall  be 
allowed  a  deduction  from  the  full  value  of  his  taxable  per- 
sonal property  to  the  extent  of  the  "just  debts"  owing  by 
him.  The  "just  debts"  which  may  be  deducted  have  been 
denned  in  the  circular  published  by  the  Department  of  Taxes 
and  Assessments  of  the  City  of  New  York  as — 

"1 — Amount  owing  on  bond  and  mortgage,  on  which  the 
person  claiming  the  offset  is  liable,  while  he  remains 
the  owner. 
2 — Amount  owing  on  promissory  notes. 
3 — Amount  owing  on  book  debits  or  contracts. 

Just  debts  do  not  include  contingent  liabilities  as 
guarantor  or  endorser,  unless  such  liabilities  have  be- 
come fixed,  or  debts  incurred  for  the  purpose  of  evading 
taxation." 


(12)  History.  The  so-called  Secured  Debts  Tax 
Law  was  first  enacted  September  1,  1911,  as  an  addition 
to  Chapter  62  of  the  Laws  of  1909,  entitled :  "An  Act 
in  Relation  to  Taxation,  Constituting  Chapter  60  of 
the  Consolidated  Laws." 

Its  first  enactment  provided  for  a  tax  at  the  rate  of 
one-half  of  one  per  cent,  on  the  secured  debt,  which 
thereafter  was  exempt  from  the  personal  property  tax 
for  an  unlimited  period.  The  operation  of  the  Law  was 
suspended  by  Chapter  169  of  the  Laws  of  1915,  effec- 
tive April  1,  1915,  which  provided  that  secured  debts 
might  be  registered  and  the  tax  paid  after  the  first  day 
of  May,  1915,  and  which,  therefore,  suspended  the  op- 
eration of  the  Act  between  April  1st  and  the  first  day 
of  May.  Chapter  465  of  the  Laws  of  1915  radically 
amended  the  Law  of  1911,  changing  the  rate  of  the  tax 
from  one-half  of  one  per  cent,  to  three-quarters  of  one 
per  cent,  and  limited  the  time  during  which  the  bonds 
could  be  exempted  to  the  period  between  May  1,  1915, 
and  November  1,  1915,  providing  that  the  exemption 
should  be  only  for  five  years  from  the  date  of  payment 
of  the  tax. 

The  present  "Secured  Debts  Tax  Law,"  in  all  its  es- 
sential features,  is  the  same  as  the  Law  of  1915. 

The  relation  of  the  secured  debts  tax  law  to 

the  mortgage  tax  law. 

The  mortgage  tax  law  was  designed  as  a  specific 
tax  on  mortgages,  recorded  in  the  State  of  New  York 


and  secured  by  real  property  therein.     Such  mortgages 
are,  generally  speaking,  of  two  kinds: 

(a)  Mortgages  given  by  a  corporation  or  an  indi- 
vidual where  there  is  only  one  bond  or  obli- 
gation, running  either  to  a  corporation  or  an 
individual. 

(b)  Mortgages  which  are  made  by  corporations, 
and  in  certain  instances  by  an  individual  or 
individuals,  to  Trustees  under  which  a  series 
of  bonds  or  obligations  are  issued  which  are 
held  by  various  persons. 

The  Law  provides  that  a  tax  of  one-half  of  one  per 
cent,  shall  be  paid  upon  all  mortgages  recorded  subse- 
quent to  July  1,  1906.  If,  at  the  time  the  obligation 
was  recorded,  the  entire  amount  of  the  mortgage  was 
not  advanced,  the  tax  was  to  be  paid  upon  the  amount 
then  advanced,  and  upon  subsequent  advances  as  they 
were  made.  Upon  payment  of  the  tax,  the  obligation 
or  obligations  issued  thereunder  are  exempt  from  per- 
sonal property  tax  for  life  of  the  obligation. 

In  the  case  of  a  mortgage  recorded  prior  to  July  1, 
1906,  under  which  the  entire  advances  had  not  been 
made,  the  tax  was  required  to  be  paid  upon  the  advances 
made  subsequent  to  July  1,  1906,  and  the  obligations 
evidencing  such  advances,  and  such  only,  were  tax  ex- 
empt. 

The  holder  of  a  mortgage  recorded  prior  to  July  1, 
1906,  or  the  owner  of  a  serial  bond  issued  and  outstand- 
ing under  a  mortgage  recorded  prior  to  July  1,  1906, 

8 


could  mate  the  mortgage  or  bond  tax  exempt  by  pre- 
senting it  to  the  recording  officer  of  the  county  where 
the  mortgage  was  first  presented  for  record  and  option- 
ally subject  it  to  the  mortgage  tax  on  the  payment  of 
which  the  security  was  exempt  from  the  personal  prop- 
erty tax. 

The  secured  debts  tax  law  was  designed  to  provide 
a  method  of  exempting  from  the  personal  property  tax, 
mortgages  upon  property  lying  without  the  State  of 
New  York  and  recorded  without  this  State,  and  any 
other  bonds  or  notes  forming  part  of  a  series  of  similar 
bonds,  notes  or  obligations  issued  under  a  deed  of  trust, 
irrespective  of  whether  such  bonds  or  notes  were  secured 
by  a  mortgage  upon  real  property.  It  also  applies  to 
public  bonds  of  States  other  than  New  York,  to  foreign 
countries  tnd  their  political  sub-divisions. 

The  primary  purpose  of  the  mortgage  tax  law 

was  to  provide  a  specific  tax,  with  the  accompanying  ex- 
emption from  the  general  property  tax,  for  mortgages 
recorded  in  the  State  of  New  York 

The  primary  purpose  of  the  secured  debts  tax  law 

was  to  provide  a  specific  tax,  with  the  exemption  from 
the  general  property  tax,  for  mortgages,  and  bonds 
secured  by  mortgages  which  were  recorded  without  the 
State  of  New  York,  and  for  other  serial  obligations. 


9 


A  mortgage  secured  by  real  property  both  within 
and  without  the  State  of  New  York  may  be  affected 

•  by  both  laws.  Property,  both  within  and  without  the 
State  of  New  York,  in  many  instances,  was  covered  by 
corporate  mortgages.  In  such  an  instance,  the  mort- 
gagor company  was  required  to  have  a  determination 
made  of  the  proportion  which  the  value  of  the  mortgaged 
property  situated  within  the  State  of  New  York  bore 
to  the  value  of  the  entire  mortgaged  property  or  prop- 
erties. The  recording  tax  could  only  be  paid  by  the 
mortgagor  company  in  respect  to  that  determined  pro- 
portion and  the  serial  bonds  issued  thereunder  could 

be  made  tax  exempt  under  the  Mortgage  Tax  Law,  only 
in  that  proportion.  This  left,  in  many  instances,  a  cer- 
tain proportion  of  a  bond,  in  the  hand  of  the  owner, 
which  was  not  tax  exempt  but  was  subject  to  the  general 
property  tax. 

To  cure  this  situtation,  the  Secured  Debts  Tax  Law  of 

•  1915  and  1916  provided  that  the  owner  of  such  a  bond 
could  exempt  such  proportion  of  his  bond  as  was  not  al- 
ready exempt  under  the  Mortgage  Tax  Law  by  paying 
seventy-five  cents  per  $100.,  or  fraction  thereof,  upon 
such  unexempt  proportion.  (Sec.  330.  Page  15,  Sec. 
340.  Page  22.)  Thereupon,  a  proportion  of  his  bond 
was  exempt  for  an  unlimited  period,  under  the  Mortgage 
Tax  Law,  and  a  proportion  exempt  for  a  period  of  Five 
Years  under  the  Secured  Debts  Tax  Law.  To  remedy 
this  situation,  two  amendments  to  the  Mortgage  Tax 
Law,  viz:   Chapters  335  and  337  of  the  Laws  of  1916, 

10 


constituting  Sees.  260,  264  of  the  Mortgage  Tax  Law, 
Pages  38,  48  were  enacted.  These  provide,  in  effect,  that 
the  mortgagor  company,  at  the  time  when  the  mortgage 
is  recorded,  may  waive  the  determination  of  the  propor- 
tion of  the  value  lying  within  and  without  the  State  of 
New  York  and  may  pay  the  entire  tax  as  if  the  proper- 
ties lay  wholly  within  the  State  of  New  York  and  that, 
thereupon,  the  bonds  should  be  exempt  from  the  personal 
property  tax.  If,  however,  the  mortgagor  company  does 
not  elect  to  waive  such  determination  and  pays  the  tax 
only  upon  the  proportion  of  the  value  of  the  mortgaged 
properties  within  the  State  of  New  York,  the  holder  of 
such  a  bond  may,  at  its  option,  present  the  bond  to  the 
recording  officer  of  the  county  where  the  mortgage, 
under  which  the  bond  was  issued,  was  first  recorded  and 
himself  pay  the  tax  upon  the  proportion  which  has  not 
been  previously  exempted,  thereby  making  his  entire 
bond  exempt  from  the  personal  property  tax.  It  will 
thus  be  seen  that  the  proportion  of  a  bond  not  exempted 
by  the  mortgagor  company  may  be  made  exempt  either 
under  the  provisions  of  the  Secured  Debts  Tax  Law  by 
payment  of  seventy-five  cents  per  $100.,  or  fraction 
thereof,  in  respect  to  such  proportion,  whereupon  the  ex- 
emption runs  for  only  five  years  from  the  date  of  pay- 
ment of  the  tax,  or,  under  the  Mortgage  Tax  Law,  such 
proportion  may  be  made  exempt  for  the  life  of  the  obli- 
gation by  payment  of  one-half  of  one  per  cent,  on  such 
proportion. 


11 


It  is  clearly  to  the  advantage  of  the  holder  of 
such  a  security  to  take  advantage  of  the  provi- 
sions of  the  Mortgage  Tax  Law,  thereby  securing  a 
lower  rate  of  tax  and  exemption  for  the  life  of  the 
obligation. 

For  the  convenience  of  the  reader,  we  have  appended 
to  the  Secured  Debts  Tax  Law  the  text  of  the  Mortgage 
Tax  Law,  containing  the  amendments  thereto,  enacted  at 
the  last  session  of  the  Legislature. 


12 


The  Tax  on  Secured  Debts 

Being  Chapter  802  of  the  Laws  of  1911,  in  effect 
September  1,  1911,  as  amended  by  Chapter  465 
of  the  Laws  of  1915,  in  effect  April  30,  1915, 
and  Chapter  261  of  the  Laws  of  1916,  in  effect 
April  21,  1916. 


ARTICLE  15 
Tax  on  Secured  Debts 

Section  330.  Definitions. 

331.  Payment  of  tax  on  secured  debt. 

332.  Stamps;  how  prepared  and  used. 

333.  No  exemption  unless  stamps  are  affixed  and  can- 

celed. 

334.  Contracts  for  dies;  New  York  City  office;  ex- 

penses, how  paid. 

335.  Illegal  use  of  stamps;  penalty. 

336.  No  deduction  of  debts  against  taxable  secured 

debt. 

337.  Application  of  taxes. 

338.  Exemption  where  tax  has  been  paid  on  secured 

debts  before  May  1,  1915. 

339.  Exemption  where  tax  has  been  paid  on  secured 

debts  between  May  1,  1915,  and  November 
1,  1915. 

340.  Apportionment  of  value  of  secured  debt  secured 

by  mortgage  of  property  situated  partly 
within  and  partly  without  the  state. 

Sec.  330.  Definitions.  The  words  "secured  debts", 
as  used  in  this  article,  shall  include : 

(1).  Any  bond,  note  or  debt  secured  by  mortgage  of 
real  property  situated  wholly  without  the  state  of 
New  York. 

(2).  Such  proportion  of  a  bond,  note  or  debt,  in- 
cluding a  bond,  note  or  printed  obligation  forming  part 
of  a  series  of  similar  bonds,  notes  or  obligations,  se- 
cured by  mortgage  or  deed  of  trust  recorded  in  the 
state  of  New  York  of  property  or  properties  situated 
partly  within  and  partly  without  the  state  of  New 
York  as  the  value  of  that  part  of  the  mortgaged  prop- 


Note.    Important  new  matter  which  has  been  inserted  in  the  law  will  be  found 
i  n  italics. 

15 


erty  or  properties  situated  without  the  state  of  New 
York  shall  bear  to  the  value  of  the  entire  mortgaged 
property  or  properties. 

(3).  Any  and  all  bonds,  notes  or  written  or  printed 
obligations,  forming  part  of  a  series  of  similar  bonds, 
notes  or  obligations,  the  payment  of  which  is  secured 
by  a  mortgage  or  deed  of  trust  of  real  or  personal  prop- 
erty, or  both,  which  mortgage  or  deed  of  trust  is 
recorded  in  some  place  outside  of  the  state  of  New 
York  and  not  recorded  in  the  state  of  New  York. 

(4).  Any  and  all  bonds,  notes  or  written  or  printed 
obligations,  forming  part  of  a  series  of  similar  bonds, 
notes  or  obligations,  which  are  secured  by  the  deposit 
of  any  valuable  securities,  as  collateral  security  for  the 
payment  of  such  bonds,  notes  or  obligations,  under  a 
deed  of  trust  or  collateral  agreement  held  by  a  trus- 
tee. 

(5).  Any  bonds,  debentures  or  notes,  forming  part 
of  a  series  of  similar  bonds,  debentures  or  notes,  which 
by  their  terms  are  not  payable  within  one  year  from 
their  date  of  issue,  and  the  payment  of  which  is  not 
secured  by  the  deposit  or  pledge  of  any  collateral 
security.  The  term  "secured  debts"  as  used  in  this 
article  shall  not  include  securities  held  as  collateral  to 
secure  the  payment  of  bonds  taxable  under  this  article 
or  under  article  eleven  of  this  chapter. 

*    Sec.  331.     Payment   of  tax   on   secured   debt. 

'After   this   article    takes   effect   and   before   the   first 

16 


day  of  January,  nineteen  hundred  and  seventeen, 
any  person  may  take  or  send  to  the  office  of  the  comp- 
troller of  this  state  any  secured  debt,  and  may  pay  to 
the  state  a  tax  at  the  rate  of  seventy-five  cents  on  each 
one  hundred  dollars  or  fraction  thereof  of  the  face  value 
of  such  secured  debt,  under  such  regulations  as  the 
comptroller  may  prescribe,  and  the  comptroller  shall 
thereupon  affix  secured  debt  stamps  hereinafter  pro- 
vided for,  to  such  secured  debt,  which  stamps  shall  be 
duly  signed  by  the  comptroller  or  his  duly  authorized 
representative  and  dated  as  of  the  date  of  the  payment 
of  such  tax.  The  comptroller  shall  keep  a  record  of 
such  secured  debt  together  with  the  name  and  address 
of  the  person  presenting  the  same  and  the  date  of  regis- 
tration. All  such  secured  debts  shall  thereafter  be  ex- 
empt from  all  taxation  in  the  state  or  any  of  the  mu- 
nicipalities or  local  divisions  of  the  state  except  as  pro- 
vided in  sections  twenty-four,  one  hundred  and  eighty- 
seven,  one  hundred  and  eighty-eight  and  one  hundred 
and  eighty-nine  of  this  chapter,  and  in  articles  ten  and 
twelve  of  this  chapter,  for  the  period  of  five  years  from 
the  payment  of  such  tax. 

Sec.  332.     Stamps,    how    prepared    and   used. 

Adhesive  stamps  for  the  purpose  of  indicating  the 
payment  of  the  tax  provided  for  by  this  article  shall 
be  prepared  by  the  comptroller,  in  such  form,  and 
of  such  denominations  and  in  such  quantities  as  he  may 
from  time  to  time  prescribe.     Upon  the  payment  of  the 

17 


tax  provided  by  this  article  upon  any  secured  debt  the 
comptroller  shall  affix  stamps  of  the  proper  denomina- 
tions, equal  in  face  value  to  the  amount  of  tax  paid,  to 
the  secured  debt,  and  shall  cancel  the  same  by  the  seal 
of  his  office  or  by  such  other  canceling  device  as  he  may 
prescribe. 

Sec.  333.  No  exemption  unless  stamps  are 
affixed  and  canceled.  The  payment  of  the  tax  upon 
any  secured  debt,  as  provided  in  this  article,  shall 
not  exempt  such  secured  debt  from  taxation,  as  pro- 
vided in  section  three  hundred  and  thirty-one,  unless 
stamps  to  the  proper  amount  are  affixed  and  canceled, 
as  provided  in  the  preceding  section. 

Sec.  334.  Contracts  for  dies;  New  York  City 
office;  expenses,  how  paid.  The  state  comptroller 
is  hereby  directed  to  make,  enter  into  and  execute 
for  and  in  behalf  of  the  state  such  contract  or 
contracts  for  dies,  plates  and  printing  necessary  for 
the  manufacture  of  the  stamps  provided  for  by  this 
article,  and  provide  such  stationery  and  clerk  hire,  to- 
gether with  such  books  and  blanks  as  in  his  discretion 
may  be  necessary  for  putting  into  operation  the  pro- 
visions of  this  article;  he  shall  be  the  custodian  of  all 
stamps,  dies,  plates  or  other  material  or  thing  fur- 
nished by  him  and  used  in  the  manufacture  of  such 
state  tax  stamps.  In  addition  to  the  receipt  of  taxes 
payable  as  provided  in  this  article  at  his  office  in  the 

18 


city  of  Albany,  the  comptroller  shall  maintain  an  office 
for  the  receipt  of  such  taxes  in  the  city  of  New  York. 
He  shall  appoint,  and  may  at  pleasure  remove,  such 
assistants,  clerks  and  other  persons  as  may  be  necessary 
to  carry  out  the  provisions  of  this  article  and  shall 
fix  and  determine  their  salaries.  All  expenses  in- 
curred by  him  and  under  his  direction  in  carrying  out 
the  provisions  of  this  article  shall  be  paid  to  him  by 
the  state  treasurer  from  any  moneys  appropriated  for 
such  purpose. 

Sec.  335.     Illegal  use  of  stamps;  penalty.      Any 

person  who  shall  willfully  remove  or  cause  to  be 
removed,  alter  or  cause  to  be  altered  the  canceling  or 
defacing  marks  of  any  adhesive  stamp  provided  for  by 
this  article  with  intent  to  use  the  same,  or  to  cause  the 
use  of  the  same  after  it  shall  have  been  used,  or  shall 
knowingly  or  willfully  sell  or  buy  any  washed  or  re- 
stored stamp,  or  offer  the  same  for  sale,  or  give  or  ex- 
pose the  same  to  any  person  for  use,  or  knowingly  use 
the  same  or  prepare  the  same  wTith  intent  for  the  fur- 
ther use  thereof;  or  shall  willfully  use  any  counterfeit 
stamp  or  any  forged  stamp  with  intent  to  defraud  the 
state  of  New  York,  shall  be  guilty  of  a  misdemeanor 
and  on  conviction  thereof  shall  be  liable  to  a  fine  of 
not  less  than  five  hundred  nor  more  than  one  thousand 
dollars,  or  be  imprisoned  for  not  more  than  six  months, 
or  by  both  such  fine  and  imprisonment,  at  the  discre- 
tion of  the  court. 


19 


Sec.  336.  No  deduction  of  debts  against  taxable 
secured  debt.  The  owner  of  any  secured  debt,  on 
which  the  tax  provided  for  in  this  article  has  not 
been  paid,  shall  be  assessed  upon  such  secured  debt 
in  the  taxing  district  in  which  he  resides,  upon 
the  fair  market  value  of  such  secured  debt  and  no  de- 
duction for  the  just  debts  owing  by  him  shall  be 
allowed  against  the  assessed  value  of  such  secured  debt, 
as  provided  in  section  twenty-one  of  this  chapter  or 
elsewhere  in  this  chapter  or  in  any  other  law  of  this 
state,  except  that  the  deduction  from  the  taxable  prop- 
erty permitted  by  section  six  of  this  chapter  shall  be 
allowed  to  any  person,  in  respect  of  any  secured  debt 
which  for  the  purpose  of  his  business,  as  hereinafter 
described  and  not  for  or  as  an  investment,  shall  be 
temporarily  owned  and  held  for  sale  by  such  person 
then  actually  engaged  in  the  bona  fide  purchase  and  sale 
of  such  securities  as  a  business,  and  who  then  shall  have 
and  maintain  an  office  or  place  of  business  in  this  state 
for  the  carrying  on  of  the  actual  bona  fide  business  of 
purchasing  and  selling  such  securities  as  distinguished 
from  the  purchase  thereof  for  investment,  but  such  de- 
duction shall  not  be  allowed  in  respect  of  securities 
owned  and  held  for  a  longer  period  than  eight  months. 

Sec.  337.  Application  of  Taxes.  The  taxes  im- 
posed under  this  article  and  the  revenues  thereof 
shall  be  paid  by  the  state  comptroller  into  the  state 
treasury  and  be  applicable  to  the  general  fund,  and  to 

20 


the  payment  of  all  claims  and  demands  which  are  a 
lawful  charge  thereon. 

Sec.  338.  Exemption  where  tax  has  been  paid 
on  secured  debts  before  May  first,  nineteen  hun- 
dred and  fifteen.  If  a  tax  shall  have  been  paid 
upon  a  secured  debt  pursuant  to  article  fifteen  of 
the  tax  law  prior  to  May  first,  nineteen  hundred 
and  fifteen,  such  secured  debt  shall  be  exempt  from 
taxation  hereunder  and  from  all  taxation  in  the 
state  or  any  of  the  municipalities  or  local  divisions  of 
the  state  until  maturity,  except  as  provided  in  sections 
twenty-four,  one  hundred  and  eighty-seven,  one  hun- 
dred and  eighty-eight  and  one  hundred  and  eighty-nine 
of  this  chapter  and  in  articles  ten  and  twelve  of  this 
chapter. 

Sec.  339.  Exemption  where  tax  has  been  paid 
on  secured  debts  between  May  first,  nineteen  hun- 
dred and  fifteen,  and  November  first,  nineteen  hun- 
dred and  fifteen.  If  a  tax  shall  have  been  paid 
upon  a  secured  debt  pursuant  to  article  fifteen  of 
the  tax  law,  between  May  first,  nineteen  hundred 
and  fifteen,  and  November  first,  nineteen  hundred 
and  fifteen,  such  secured  debt  shall  be  exempt 
from  taxation  hereunder,  and  from  all  taxation  in 
the  state  or  any ,  of  the  municipalities  or  local 
divisions  of  the  state,  for  the  period  of  five  years  from 
the  date  of  the  payment  of  such  tax,  except  as  provided 


21 


in  sections  twenty-four,  one  hundred  and  eighty-seven, 
one  hundred  and  eighty-eight  and  one  hundred  and 
eighty-nine,  of  this  chapter,  and  in  articles  ten  and 
twelve  of  this  chapter. 

Sec.  340.  Apportionment  of  value  of  secured 
debt  secured  by  mortgage  of  property  situated 
partly  within  and  partly  without  the  state.      If  a 

bond,  note  or  debt  be  secured  by  mortgage  or  deed 
of  trust  recorded  in  the  state  of  New  York  of 
property  or  properties,  situated  partly  within  and 
partly  without  the  state  of  New  York,  and  a 
proportion  of  such  bond,  note  or  debt  constitutes 
a  secured  debt  as  provided  by  section  three  hun- 
dred and  thirty,  the  holder  of  such  secured  debt  may 
apply  to  the  comptroller  for  a  determination  of  the  pro- 
portion of  such  bond,  note  or  debt  which  is  taxable  as 
a  secured  debt  under  this  article  and  the  comptroller 
shall,  as  soon  as  practicable  thereafter,  furnish  to  such 
applicant  a  determination  upon  which  the  tax  imposed 
by  this  article  on  such  secured  debt  shall  be  based, 
which  determination  shall  be  in  the  manner  provided 
for  in  section  two  hundred  and  sixty  of  this  chapter 
made  in  respect  of  the  apportionment  of  the  value  of 
such  mortgaged  property  in  connection  with  the  record- 
ing within  the  state  of  New  York  of  the  mortgage  or 
other  indenture  by  which  such  secured  debt  may  be 
secured. 

§  2.  Article  fifteen  of  such  chapter,   as  added  by 


chapter  eight  hundred  and  two  of  the  laws  of  nineteen 
hundred  and  eleven  and  amended  by  chapters  one  hun- 
dred and  sixty-nine  and  four  hundred  and  sixty-five 
of  the  laws  of  nineteen  hundred  and  fifteen,  is  hereby 
repealed;  but  such  repeal  shall  not  affect  or  impair  the 
exemptions  provided  for  in  sections  three  hundred  and 
thirty-eight  and  three  hundred  and  thirty-nine  of  the 
tax  law  as  added  by  this  act. 

§  3.  This  act  shall  take  effect  immediately. 


23 


The  Mortgage  Tax  Law 

of  the  State  of  New  York 


Being  the  Article  Entitled 

"Tax  on  Mortgages" 

constituting 

Article  11,  Chapter  62  of  the  Laws  of  1909 

as  amended  by 

Laws  of  1909,  Chapter  412 
Laws  of  1910,  Chapter  601 
Laws  of  1913,  Chapter  665 
Laws  of  1914,  Chapter  398 
Laws  of  1914,  Chapter  399 
Laws  of  1915,  Chapter  447 
Laws  of  1916,  Chapter  323 
Laws  of  1916,  Chapter  335 
Laws  of  1916,  Chapter  336 
Laws  of  1916,  Chapter  337 


ARTICLE  11 

Tax  on  Mortgages 

Section  250.  Definitions. 

251.  Exemption  from  local  taxation. 

252.  Exemptions. 

253.  Recording  tax. 

254.  Optional  tax  on  prior  mortgages. 

255.  Supplemental  mortgages. 

256.  Mortgages  for  indefinite  amounts  or  for  contract  obliga- 

tions. 

257.  Payment  of  taxes. 

258.  Effect  of  nonpayment  of  taxes. 

259.  Trust  mortgages. 

260.  Determination  and  apportionment  by  the  State  Tax 

Commission. 

261.  Payment  over  and  distribution  of  taxes. 

262.  Expenses  of  officers. 

263.  Supervisory  power  of  tax  commission  and  comptroller . 

264.  Tax  on  prior  advance  mortgages. 

Sec.  250.  Definitions.  The  term  "real  property," 
as  used  in  this  article,  in  addition  to  the  defini- 
tion thereof  contained  in  Section  two  of  this  chapter, 
includes  everything  a  conveyance  or  mortgage  of  which 
can  be  recorded  as  a  conveyance  or  mortgage  of  real 
property  under  the  laws  of  the  State.  The  term  "mort>- 
gage,"  as  used  in  this  article,  includes  every  mortgage 
or  deed  of  trust  which  imposes  a  lien  on  or  affects  the 
title  to  real  property,  notwithstanding  that  such  prop- 
erty may  form  a  part  of  the  security  for  the  debt  or 
debts  secured  thereby.  Executory  contracts  for  the  sale  of 
real  property  under  which  the  vendee  has  or  is  entitled 


27 


to  possession  shall  be  deemed  to  be  mortgages  for  the 
purposes  of  this  article  and  shall  be  taxable  at  the 
amount  unpaid  on  such  contracts.  A  contract  or  agree- 
ment by  which  the  indebtedness  secured  by  any  mort- 
gage is  increased  or  added  to,  shall  be  deemed  a  mort- 
gage of  real  property  for  the  purpose  of  this  article, 
and  shall  be  taxable  as  such  upon  the  amount  of  such 
increase  or  addition. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  251.     Exemption  from  local  taxation.    All 

mortgages  of  real  property  situated  within  the  state 
which  are  taxed  by  this  article  and  the  debts  and  the 
obligations  which  they  secure,  together  with  the  paper 
writings  evidencing  the  same,  shall  be  exempt  from 
other  taxation  by  the  state,  counties,  cities,  towns,  vil- 
lages, school  districts  and  other  local  subdivisions  of 
the  state,  except  that  such  mortgage  shall  not  be  ex- 
empt from  the  taxes  imposed  by  sections  twenty-four, 
one  hundred  and  eighty-seven,  one  hundred  and  eighty- 
eight,  one  hundred  and  eighty-nine  and  article  ten  of 
this  chapter. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  252.  Exemptions.  No  mortgage  of  real 
property  situated  within  this  state  shall  be  exempt, 
and  no  person  or  corporation  owning  any  debt  or  obli- 
gation secured  by  mortgage  of  real  property  situated 
within  this  state  shall  be  exempt,  from  the  taxes  im- 
posed by  this  article  by  reason  of  anything  contained 


in  any  other  statute,  or  by  reason  of  any  provision  in 
any  private  act  or  charter  which  is  subject  to  amend- 
ment or  repeal  by  the  legislature,  or  by  reason  of  non- 
residence  within  this  state  or  for  any  other  cause. 

Sec.  253.  Recording  tax.  A  tax  of  fifty  cents 
for  each  one  hundred  dollars  and  each  remaining 
major  fraction  thereof  of  principal  debt  or  obligation 
which  is,  or  under  any  contingency  may  be  secured  at 
the  date  of  the  execution  thereof  or  at  any  time  there- 
after by  a  mortgage  on  real  property  situated  within  the 
state  recorded  on  or  after  the  first  day  of  July,  nine- 
teen hundred  and  six,  is  hereby  imposed  on  each  such 
mortgage,  and  shall  be  collected  and  paid  as  provided 
in  this  article.  If  the  principal  debt  or  obligation 
which  is  or  by  any  contingency  may  be  secured  by 
such  mortgage  recorded  on  or  after  the  first  day  of 
July,  nineteen  hundred  and  seven,  is  less  than  one  hun- 
dred dollars,  a  tax  of  fifty  cents  is  hereby  imposed  on 
such  mortgage,  and  shall  be  collected  and  paid  as  pro- 
vided in  this  article. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  254.     Optional   tax   on   prior    mortgages. 

Whenever  any  mortgage  other  than  a  mortgage  speci- 
fied in  section  two  hundred  and  sixty-four  has  been  re- 
corded prior  to  July  first,  nineteen  hundred  and  six, 
the  record  owner  thereof  may  file  with  the  recording 
officer  of  the  county  in  which  the  real  property,  or  any 


part  thereof,  on  which  said  mortgage  is  a  lien,  is  situ- 
ated, a  written  statement  under  oath  verified  by  the  rec- 
ord owner  or  the  agent  or  officer  of  such  record  owner 
describing  such  mortgage  by  giving  the  date  of  the  same 
and  the  liber  and  page  of  the  record  thereof  together 
with  the  names  of  the  parties  thereto,  specifying  the 
amount  then  remaining  unpaid  on  the  debt  or  obliga- 
tion secured  thereby,  and  electing  that  it  shall  become 
subject  to  the  tax  prescribed  by  section  two  hundred 
and  fifty-three  of  this  chapter.  Whenever  any  unre- 
corded mortgage  has  been  executed  and  delivered  prior 
to  July  first,  nineteen  hundred  and  six,  the  owner 
thereof  may  record  the  same  upon  filing  with  the  re- 
cording officer  a  similar  statement  and  paying  the  tax 
as  herein  prescribed.  A  tax  shall  thereupon  be  com- 
puted, levied  and  collected  upon  the  amount  of  the 
principal  debt  or  obligation  unpaid  at  the  time  of  the 
filing  of  such  statement,  or  of  the  recording  of  such 
mortgage  and  filing  of  such  statement.  On  the  pay- 
ment of  such  tax  as  herein  provided,  the  recording 
officer  shall  note  on  the  margin  of  the  record  of  such 
mortgage  the  fact  of  such  statement  and  of  the  amount 
of  the  tax  paid,  attested  by  his  signature,  whereupon 
such  mortgage  and  the  debt  or  obligation  secured  there- 
by shall  be  entitled  to  the  exemptions  and  immunities 
conferred  by  this  article,  and  all  of  the  provisions  of 
this  article  shall  thereafter  be  applicable  to  said  mort- 
gage. Whenever  the  original  mortgage  is  presented  to 
ihe  clerk  together  with  the  statement  he  shall  also  note 

30 


en  said  original  mortgage  the  fact  of  the  filing  of  the 
said  statement  and  also  the  amount  of  the  tax  paid 
duly  attested  by  his  signature,  which  indorsement  shall 
be  conclusive  evidence  of  the  payment  of  such  tax. 

Sec.  255.  Supplemental  mortgages.  If  subse- 
quent to  the  recording  of  a  mortgage  on  which  all 
taxes,  if  any,  accrued  under  this  article  have  been  paid, 
a  supplemental  instrument  or  mortgage  is  recorded  for 
the  purpose  of  correcting  or  perfecting  any  recorded 
mortgage,  or  pursuant  to  some  provision  or  covenant 
therein,  or  an  additional  mortgage  is  recorded  impos- 
ing the  lien  thereof  upon  property  not  originally 
covered  by  or  not  described  in  such  recorded  primary 
mortgage  for  the  purpose  of  securing  the  principal  in- 
debtedness which  is  or  under  any  contingency  may  be 
secured  by  such  recorded  primary  mortgage,  such  ad- 
ditional instrument  or  mortgage  shall  not  be  subject  to 
taxation  under  this  article,  unless  it  creates  or  secures 
a  new  or  further  indebtedness  or  obligation  other  than 
the  principal  indebtedness  or  obligation  secured  by  or 
which  under  any  contingency  may  be  secured  by  the 
recorded  primary  mortgage,  in  which  case,  a  tax  is  im- 
posed as  provided  by  section  two  hundred  and  fifty- 
three  of  this  chapter  on  such  new  or  further  indebted- 
ness or  obligation,  and  shall  be  paid  to  the  proper  re- 
cording officer  at  the  time  such  instrument  or  addi- 
tional mortgage  is  recorded.  If  at  the  time  of  record- 
ing such  instrument,  or  additional  mortgage  any  ex- 
emption is  claimed  under  this  section,  there  shall  be 

31 


filed  with  the  recording  officer  and  preserved  in  his 
office  a  statement  under  oath  of  the  facts  on  which  such 
claim  for  exemption  is  based.  The  determination  of  the 
recording  officer  upon  the  question  of  exemption  shall 
be  reviewable  by  the  tax  commission. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  256,  Mortgages  for  indefinite  amounts  or 
for  contract  obligations.  If  the  principal  indebt- 
edness secured  or  which  by  any  contingency  may 
be  secured  by  a  mortgage  is  not  determinable  from 
the  terms  of  the  mortgage,  or  if  a  mortgage  is 
given  to  secure  the  performance  by  the  mortgagor 
or  any  other  person  of  a  contract  obligation  other 
than  the  payment  of  a  specific  sum  of  money 
and  the  maximum  amount  secured  or  which  by 
any  contingency  may  be  secured  by  the  mortgage  is 
not  expressed  therein,  such  mortgage  shall  be  taxable 
under  section  two  hundred  and  fifty-three  of  this  chap- 
ter upon  the  value  of  the  property  covered  by  the  mort 
gage,  which  shall  be  determined  by  the  recording  offi- 
cer to  whom  such  mortgage  is  presented  for  record,  un- 
less at  the  time  of  presenting  such  mortgage  for  rec- 
ord the  owner  thereof  shall  file  with  the  recording 
officer  a  sworn  statement  of  the  maximum  amount 
secured  or  which  under  any  contingency  may  be 
secured  by  the  mortgage.  If  such  maximum  amount 
is  expressed  in  the  mortgage  or  in  a  sworn  statement 
filed  as  required  by  this  section,  such  amount  shall  be 

32 


the  basis  for  assessing  the  tax  imposed  by  this  article. 
A  statement  filed  by  the  owner  of  a  mortgage  pursuant 
to  this  section  shall  thereafter  at  all  times  be  binding 
upon  and  conclusive  against  such  owner,  the  holders  of 
any  bonds  or  obligations  secured  by  such  mortgage  and 
all  persons  claiming  through  the  mortgagee  any  inter- 
est in  the  mortgage  or  the  mortgaged  premises.  If 
the  maximum  amount  secured  or  which  by  any  con- 
tingency may  be  secured  by  the  mortgage  is  not  ex- 
pressed in  the  mortgage  or  in  a  sworn  statement  as  au- 
thorized by  this  section,  the  recording  officer  at  the 
time  such  mortgage  is  offered  for  record  may  require 
the  mortgagor  or  mortgagee  to  furnish  him  with  proofs 
as  to  such  facts  as  he  deems  necessary  for  the  purpose 
of  computing  the  value  of  the  property  covered  by  the 
mortgage  and  such  proofs  shall  include  an  affidavit  of 
appraisal  of  the  value  of  the  property  made  by  at  least 
two  competent,  disinterested  persons  and  shall  be  pre- 
served in  his  office.  His  determination  and  copies  of 
the  proofs  as  to  the  basis  for  computing  the  tax  on  such 
mortgage  shall  be  forwarded  to  and  subject  to  review 
by  the  state  tax  commission.  Such  mortgage  shall 
not  be  recorded  until  the  statement  is  filed  or  the  proofs 
are  furnished  as  required  by  this  article. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  257.  Payment  of  taxes.  The  taxes  imposed 
by  this  article  shall  be  payable  on  the  recording 
of    each   mortgage   of   real    property   subject  to  taxes 

33 


thereunder.  Such  taxes  shall  be  paid  to  the  recording 
officer  of  any  county  in  which  the  real  property  or 
any  part  thereof  is  situated.  It  shall  be  the  duty  of 
such  recording  officer  to  indorse  upon  each  mortgage  a 
receipt  for  the  amount  of  the  tax  so  paid.  Any  mort- 
gage so  indorsed  may  thereupon  or  thereafter  be  re- 
corded by  any  recording  officer  and  the  receipt  for 
such  tax  indorsed  upon  each  mortgage  shall  be  recorded 
therewith.  The  record  of  such  receipt  shall  be  con- 
clusive proof  that  the  amount  of  tax  stated  therein  has 
been  paid  upon  such  mortgage. 

Sec.  258.     Effect  of  nonpayment  of  taxes.       No 

mortgage  of  real  property  shall  be  recorded  by  any 
county  clerk  or  register,  unless  there  shall  be  paid  the 
tax  imposed  by  and  as  in  this  article  provided.  No 
mortgage  of  real  property  which  is  subject  to  the  taxes 
imposed  by  this  article  shall  be  released,  discharged  of 
record  or  received  in  evidence  in  any  action  or  pro- 
ceeding, nor  shall  any  assignment  of  or  agreement  ex- 
tending any  such  mortgage  be  recorded  unless  the 
taxes  imposed  thereon  by  this  article  shall  have  been 
paid  as  provided  in  this  article.  JSTo  judgment  or  final 
order  in  any  action  or  proceeding  shall  be  made  for 
the  foreclosure  or  the  enforcement  of  any  mortgage 
which  is  subject  to  the  tax  imposed  by  this  article 
or  of  any  debt  or  obligation  secured  by  any 
such  mortgage,  unless  the  taxes  imposed  by  this  article 
shall  have  been  paid  as  provided  in  this  article;  and 

34 


whenever  it  shall  appear  that  any  mortgage  has  been 
recorded  or  that  any  advance  has  been  made  on  a  prior 
advance  mortgage  or  on  a  corporate  trust  mortgage 
without  payment  of  the  tax  imposed  by  this  article 
there  shall  be  paid  in  addition  to  the  amount  of  the 
tax  a  sum  equal  to  one  per  centum  thereof  for  each 
month  the  tax  remains  unpaid,  which  sum  shall  be 
added  to  the  tax  and  paid  or  collected  therewith. 
(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  259.  Trust  mortgages.  In  the  case  of  mort- 
gages made  by  corporations  in  trust  to  secure  pay- 
ment of  bonds  or  obligations  issued  or  to  be  issued 
thereafter,  if  the  total  amount  of  principal  indebted- 
ness which  under  any  contingency  may  be  advanced 
or  accrue  or  which  may  become  secured  by  any  such 
mortgage  which  is  subject  to  this  article  has  not  been 
advanced  or  accrued  thereon  or  become  secured  thereby 
before  such  mortgage  is  recorded,  it  may  contain  at  the 
end  thereof  a  statement  of  the  amount  which  at  the 
time  of  the  execution  and  delivery  thereof  has  been 
advanced  or  accrued  thereon,  or  which  is  then  secured 
by  such  mortgage;  thereupon  the  tax  payable  on  the 
recording  of  the  mortgage  shall  be  computed  on  the 
basis  of  the  amount  so  stated  to  have  been  so  advanced 
or  accrued  thereon  or  which  is  stated  to  be  secured 
thereby.  Such  statement  shall  thereafter  at  all  times 
be  binding  upon  and  conclusive  against  the  mortgagee, 
the  holders  of  any  bonds  or  obligations  secured  by  such 

35 


mortgage  and  all  persons  claiming  through  the  mort- 
gagee any  interest  in  the  mortgage  or  in  the  mortgaged 
premises.  Whenever  a  further  amount  is  to  be  ad- 
vanced under  the  original  mortgage,  or  shall  accrue 
thereon  or  become  secured  thereby,  the  corporation 
making  such  mortgage  shall  pay  the  tax  on  such  amount 
at  or  before  the  time  when  such  amount  is  to  be  ad- 
vanced, accrues  or  becomes  secured  and  shall,  at  the 
time  of  paying  such  tax,  file  in  the  office  of  the  record- 
ing officer  where  such  mortgage  has  been  or  is  first  re- 
corded and  with  the  tax  commission  a  state- 
ment, verified  by  the  secretary,  treasurer  or 
other  proper  officer,  of  said  corporation  of  the 
amount  of  principal  indebtedness  to  be  so  advanced, 
accruing  or  becoming  secured,  and  the  certification  of 
any  bond  or  bonds  by  the  trust  mortgagee  shall  be 
deemed  an  advance  under  this  article.  Such  additional 
tax  shall  be  paid  to  the  recording  officer  where  such 
mortgage  has  been  or  is  first  recorded  and  a  receipt 
therefor  shall  be  indorsed  upon  the  mortgage  and  pay- 
ment therefor  shall  be  noted  in  the  margin  of  the  rec- 
ord of  such  mortgage  and  if  requested  a  duplicate  re- 
ceipt for  such  payment  shall  also  be  given  to  the  party 
paying  such  tax  and  the  note  of  such  payment  or  ad- 
ditional payment  or  such  receipt  shall  have  the  same 
force  and  effect  as  the  record  of  receipt  of  the  tax 
which  under  this  article  is  payable  at  or  before  the 
recording  of  the  mortgage.  If  such  additional  tax  is 
not  paid  as  required  by  this  section,  the  trust  mort- 

36 


gagee  shall  not  certify  any  bond  or  other  obligation 
issued  on  account  thereof.  The  corporation  making 
such  mortgage  or  the  owner  of  the  property  which 
secures  the  mortgage  debt  shall  annually  within  thirty 
days  after  July  first,  and  until  it  shall  appear  by  such 
statement  that  the  maximum  amount  of  principal  in- 
debtedness secured  by  such  mortgage  has  been  ad- 
vanced, has  accrued  or  become  secured  and  the  tax 
thereon  paid,  file  in  the  office  of  the  tax  commssion  and 
the  recording  officer  where  such  mortgage  has  been  or  is 
first  recorded  a  statement,  verified  by  the  secretary, 
treasurer  or  other  proper  officer  of  said  corporation, 
showing : 

1.  the  name  of  the  mortgagor  and  the  mortgagee ; 

2.  the  date  of  the  mortgage  and  the  county  where 
first  recorded; 

3.  the  maximum  amount  of  principal  debt  or  obli- 
gation which  under  any  contingency  may  be  secured 
by  such  mortgage; 

4.  the  amount  advanced  on  such  mortgage  during 
the  year  ending  June  thirtieth  preceding,  with  the 
date  and  the  amount  of  each  advancement ; 

5.  in  the  case  of  a  mortgage  recorded  prior  to  July 
first,  nineteen  hundred  and  six,  the  first  annual  state- 
ment filed  under  this  section  as  hereby  amended,  shall 
state  the  total  amount  advanced  prior  to  July  first, 
nineteen  hundred  and  six,  and  the  date  and  the  amount 
of  each  subsequent  advancement  to  the  end  of  the 
period  covered  by  the  statement. 

37 


A  failure  to  file  any  statement  required  by  this  sec- 
tion within  the  time  required  shall  subject  the  corpora- 
tion making  such  mortgage  to  a  penalty  of  one  hun- 
dred dollars  per  day  for  each  day  such  failure  con- 
tinues, recoverable  by  the  attorney-general  in  an  action 
brought  in  the  name  of  the  people  of  the  state  of  New 
York. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  260.  Determination  and  apportionment  by 
the  state  tax  commission.  When  the  real  property 
covered  by  a  mortgage  is  situated  in  more  than 
one  tax  district,  the  state  tax  commission  shall  de- 
duct from  the  relative  assessments  of  such  real 
property  in  the  respective  tax  districts  covered  by  such 
mortgage  any  prior  existing  mortgage  liens  and  shall 
then  apportion  the  tax  paid  on  such  mortgage  between 
the  respective  tax  districts  upon  the  basis  of  the  rela- 
tive assessments  of  such  real  property  as  the  same  ap- 
pear on  the  last  assessment-rolls  less  the  deduction,  if 
any.  If,  however,  the  whole  or  any  part  of  the  prop- 
erty covered  by  such  a  mortgage  is  not  assessed  upon 
the  last  assessment-roll  or  rolls  of  the  tax  district  or 
districts  in  which  it  is  situated,  or  is  so  assessed,  as  a 
part  of  a  larger  tract,  that  the  assessed  value  cannot  be 
determined,  or  if  improvements  have  been  made  to  such 
an  extent  as  materially  to  change  the  value  of  the 
property  so  assessed,  the  tax  commission  may  require 
the  local  assessors  in  the  respective  tax  districts,  or  the 

38 


mortgagor,  or  mortgagee,  to  furnish  sworn  appraisals 
of  the  property  in  each  tax  district,  and  upon  such  ap- 
praisals shall  determine  the  apportionment.  If  such 
mortgage  covers  real  property  in  two  or  more  counties, 
the  tax  commission  shall  determine  the  proportion  of 
the  tax  which  shall  be  paid  by  the  recording  officer  who 
has  received  the  same  to  the  recording  officers  of 
the  other  counties  in  which  are  situated  the  tax  dis- 
tricts entitled  to  share  therein.  When  any  recording 
officer  shall  pay  any  portion  of  a  tax  to  the  recording 
officer  of  another  county,  he  shall  forward  with  such 
tax  a  description  sufficient  to  identify  the  mortgage  on 
which  the  tax  has  been  paid,  and  the  recording  officer 
receiving  such  tax  shall  note  on  the  margin  of  the 
record  of  such  mortgage  the  fact  of  such  payment,  at- 
tested by  his  signature.  The  tax  commission  shall 
make  an  order  of  determination  and  apportionment  in 
respect  to  each  such  mortgage  and  file  a  certified  copy 
thereof  with  the  recording  officer  of  each  county  in 
which  a  part  of  the  mortgaged  real  property  is  situated. 
When  the  real  property  covered  by  a  mortgage  is 
partly  within  the  state  and  partly  without  the  state  it 
shall  be  the  duty  of  the  tax  commission  to  determine 
what  portion  of  the  mortgage  or  of  advancements 
thereon  shall  be  taxable  under  this  article.  Such  de- 
termination shall  be  made  in  the  following  manner: 
First :  Determine  the  respective  values  of  the  property 
within  and  without  the  state,  and  deduct  therefrom  the 
amount  of  any  prior  existing  mortgage  liens,  excepting 

39 


such  liens  as  are  to  be  replaced  by  the  advancements 
under  consideration.  Second:  Find  the  ratio  that  the 
net  value  of  the  mortgaged  property  within  the  state 
bears  to  the  net  value  of  the  entire  mortgaged  prop- 
erty. Third:  Make  the  determination  of  the  portion 
of  the  mortgage  or  of  the  advancements  thereon  which 
shall  be  taxable  under  this  article  by  applying  the  ratio 
so  found.  If  a  mortgage  covering  property  partly 
within  and  partly  without  the  state  is  presented  for 
record  before  such  determination  has  been  made,  or  at 
the  time  when  an  advance  is  made  on  a  corporate  trust 
mortgage  or  on  a  prior  advance  mortgage,  there  may  be 
presented  to  the  recording  officer  a  statement  in  dupli- 
cate verified  by  the  mortgagor  or  an  officer  or  duly  au- 
thorized agent  of  the  mortgagor,  in  which  shall  be 
specified  the  net  value  of  the  property  within  the  state 
and  the  net  value  of  the  property  without  the  state 
covered  by  such  mortgage.  One  of  such  statements 
shall  be  filed  by  the  recording  officer  and  the  other 
shall  be  forthwith  transmitted  by  him  to  the  state  tax 
commission.  The  tax  payable  under  this  article  be- 
fore the  determination  by  the  tax  commission  shall  be 
computed  upon  such  portion  of  the  principal  indebted- 
ness secured  by  the  mortgage,  or  of  the  sum  advanced 
thereon,  as  the  net  value  of  the  mortgaged  property 
within  the  state  bears  to  the  net  value  of  the  entire 
mortgaged  property  as  set  forth  in  such  statement.  The 
tax  commission  shall  on  receipt  of  the  statement  from 
the  recording  officer  and  on  not  less  than  ten  days' 


40 


notice  served  personally  or  by  mail  upon  the  mort- 
gagor, the  mortgagee  and  the  state  comptroller,  proceed 
to  make  the  required  determination.  In  determining  the 
separate  values  of  the  property  within  and  without  the 
state  the  tax  commission  shall  consider  only  the  tangible 
property,  real  and  personal,  except  that  leases  of  real 
property  shall  be  deemed  tangible  property.  For  the  pur- 
pose of  determining  such  value  the  tax  commission  may 
require  the  mortgagor  or  mortgagee  to  furnish  by  affi- 
davit or  verified  report  such  information  or  data  as  it- 
may  deem  necessary,  and  may  require  and  take  the 
testimony  of  the  mortgagor,  mortgagee  or  any  other 
person.  A  certified  copy  of  the  order  of  determina- 
tion and  apportionment  shall  be  delivered  personally  or 
by  mail  to  the  mortgagor,  the  mortgagee  and  the  state 
comptroller,  and  any  tax  under  such  determination 
which  has  not  been  paid  shall  be  paid  within  ten  days 
after  service  of  such  certified  copy;  if,  however,  the 
tax  paid  at  the  time  of  filing  the  statement  hereinbe- 
fore specified  with  the  recording  officer  is  in  excess  of 
the  tax  determined  to  be  payable,  the  certificate  of  de- 
termination and  apportionment  shall  direct  the  re- 
cording officer  to  refund  to  the  person  paying  such  tax 
the  amount  of  such  excess;  provided  that  no  refund 
shall  be  made  of  any  taxes  paid  pursuant  to  a  previous 
determination. 

The  mortgagor  or  mortgagee  of  any  mortgage  which 
covers  property  within  and  without  the  state  may  waive 
the  determination  provided  for  in  this  section  and  pay 

41 


the  tax  upon  the  full  amount  of  such  mortgage  or  of 
any  advancement  thereon,  and  thereafter  the  whole 
amount  of  such  mortgage  or  advancement  shall  be  ex- 
empt from  taxation  under  the  provisions  of  section  two 
hundred  and  fifty-one  of  this  article. 

The  tax  commission  shall  adopt  rules  to  govern  the 
procedure  and  the  manner  of  taking  evidence  in  all 
the  matters  provided  for  by  this  section  and  may  re- 
quire verified  statements  to  be  furnished  either  by 
boards  of  assessors,  recording  officers  or  other  persons 
having  knowledge  in  relation  to  such  matters.  Failure 
on  the  part  of  any  person  or  officer  to  furnish  a  state- 
ment or  other  data  when  required  so  to  do  pursuant  to 
the  provisions  of  this  section  shall  render  such  person 
or  officer  liable  to  a  penalty  of  one  hundred  dollars,  to 
be  recovered  by  the  attorney-general  in  an  action 
brought  in  the  name  of  the  people  of  the  state  of  New 
York. 

In  making  determination  and  apportionment  under 
this  section  the  tax  commission  shall  consider  all  ad- 
vancements made  upon  a  mortgage  after  July  first, 
nineteen  hundred  and  six,  in  the  aggregate,  which 
aggregate  shall  be  obtained  by  adding  all  advancements 
made  after  July  first,  nineteen  hundred  and  six,  to  the 
last  advancement  and  the  total  shall  be  treated  as  a 
whole  mortgage,  considering  the  status  of  the  prop- 
erty as  of  the  time  the  last  advancement  is  made.  In 
all  cases  under  this  section  in  which  it  shall  appear  that 
the  prior  incumbrances  exceed  the  assessed  or  appraised 

42 


value  of  the  property  in  one  or  more  tax  districts  the 
oommission  may,  by  a  process  of  equalization  or  other- 
wise, establish  a  basis  of  apportionment  that  will  be 
equitable  and  fair. 

In  any  case  where  a  determination  has  been  made 
pursuant  to  this  section  in  respect  to  a  mortgage  or 
advancements  upon  a  mortgage  covering  property  with- 
in and  without  the  state  and  the  tax  has  been  paid 
upon  a  portion  of  the  indebtedness  secured  by  such 
mortgage  pursuant  to  such  determination,  the  mort- 
gagor or  mortgagee  or  the  owner  of  any  bonds  secured 
by  such  mortgage  may  file  with  the  recording  officer 
where  such  mortgage  is  first  recorded  a  verified  state- 
ment in  form  and  substance  as  provided  for  in  section 
two  hundred  and  sixty-four  of  this  article,  which  state- 
ment shall  also  specify  the  portion  of  the  indebtedness 
secured  by  such  mortgage  or  bonds  upon  which  the  tax 
has  been  paid,  and  thereupon  the  recording  officer  shall 
collect  the  tax  upon  the  remaining  portion  of  such 
mortgage  or  bonds,  and  all  of  the  provisions  of  said 
section  two  hundred  and  sixty-four  in  respect  to  the 
indorsement  of  the  payment  of  the  tax  and  notation  on 
the  margin  of  the  record  of  the  mortgage  shall  be  ap- 
plicable to  taxes  paid  upon  such  remaining  portion, 
and  thereafter  the  whole  amount  of  such  mortgage,  ad- 
vancement or  bonds  shall  be  exempt  from  taxation 
under  the  provisions  of  section  two  hundred  and  fifty- 
one  of  this  article. 

(As  amended  by  Laws  of  1916,  Chapter  335.) 

43 


Sec.  261.  Payment  over  and  distribution  of 
taxes.  Upon  the  first  day  of  each  month  the  re- 
cording officer  of  each  county  shall  pay  over  to  the 
county  treasurer  all  moneys  received  during  the  pre- 
ceeding  month  upon  account  of  taxes  paid  to  him  as 
herein  prescribed,  after  deducting  the  necessary  ex- 
penses of  his  office  as  provided  in  section  two  hundred 
and  sixty-two,  except  taxes  paid  upon  mortgages  which 
under  the  provisions  of  section  two  hundred  and  sixty 
are  to  be  apportioned  by  the  tax  commission  between 
several  counties,  which  taxes  and  money  shall  be  paid 
over  by  him  as  provided  by  the  determination  of  said 
tax  commission  within  five  days  after  the  filing  of  said 
determination  in  his  office.  The  county  treasurer 
of  each  county  shall  on  the  first  day  of  Janu- 
ary, April,  July  and  October  in  each  year, 
after  having  deducted  the  necessary  expenses  of  his 
office  provided  in  section  two  hundred  and  sixty-two, 
transmit  one-half  of  this  net  amount  collected  under 
the  provisions  of  this  article  to  the  state  treasurer  and 
shall  receive  from  the  state  treasurer  a  receipt  therefor 
countersigned  by  the  comptroller.  And  the  remaining 
portion  thereof  in  the  counties  of  New  York,  Kings, 
Queens,  Eichmond  and  Bronx  shall  be  paid  into  the 
general  fund  of  the  city  of  New  York  and  be  applied 
to  the  reduction  of  taxation,  and  in  the  other  counties 
of  the  state  the  remaining  portion  shall  be  held  by  the 
respective  county  treasurers  subject  to  the  order  of 
the    board    of    supervisors    as    hereinafter    provided. 

44 


Prior  to  the  first  day  of  November  in  each  year  the  re- 
cording officer  shall  cause  to  be  prepared  a  statement 
containing  a  description  of  all  mortgages  upon  which 
taxes  have  been  paid  by  a  reference  to  the  date  of  each 
mortgage,  the  name  of  the  mortgagor  and  mortgagee, 
the  amount  of  the  principal  debt  upon  which  the  tax 
was  paid  together  with  the  book  and  page  where  said 
mortgage  is  recorded,  together  with  the  tax  district  in 
which  the  mortgaged  property  is  situated,  and  if  situ- 
ated in  two  or  more  tax  districts  the  amount  appor- 
tioned to  each  tax  district  by  the  tax  commission,  and 
the  amount  deducted  for  his  necessary  expenses  as  ap- 
proved by  the  tax  commission  and  shall  file  the  state- 
ment with  the  clerk  of  the  board  of  supervisors,  and 
a  copy  thereof  with  the  tax  commission.  The  boards 
of  supervisors  of  the  several  counties  shall,  on  or  be- 
fore the  fifteenth  day  of  December  in  each  year,  ascer- 
tain from  the  statement  filed  with  their  clerk  by  the 
recording  officer  the  location  of  the  mortgaged  prop- 
erty with  respect  to  the  several  tax  districts  and  the 
amount  of  tax  properly  to  be  credited  to  each  tax  dis- 
trict, which  shall  be  applicable  to  the  payment  of  state, 
county  and  city,  or  town  expenses;  except  that  where 
a  town  contains  within  its  limits  an  incorporated  vil- 
lage, or  portion  thereof,  the  supervisors  shall  apportion 
to  the  village  or  villages  so  much  of  the  share  credited 
to  the  said  town  as  the  assessed  value  of  said  village  or 
portion  thereof  bears  to  twice  the  total  assessed  valua- 
tion of  the  town,  and  the  remaining  balance  shall  be 

45 


applicable  to  the  payment  of  state,  county  and  town 
taxes.  The  board  of  supervisors  of  each  county,  on  or 
before  the  fifteenth  day  of  December  each  year,  shall 
determine  the  respective  sums  applicable  hereunder  to 
each  of  the  foregoing  purposes  and  shall  issue  their 
warrant  for  the  payment  to  the  city  treasurer  or  town 
supervisor,  of  the  amount  payable  to  said  city  or  town, 
and  their  warrant  for  the  payment  to  the  village  treas- 
urer of  the  sum  of  money  to  which  the  village  shall  be 
entitled,  which  sum  shall  be  credited  to  the  general 
fund  of  the  village. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  262.  Expenses  of  officers.  Eecording  of- 
ficers and  county  treasurers  shall  severally  be  entitled 
to  receive  all  their  necessary  expenses  for  the  purposes 
of  this  article,  including  printing,  hire  of  clerks  and 
assistants,  being  first  approved  and  allowed  by  the  tax 
commission,  which  shall  be  retained  by  them  out  of  the 
moneys  coming  into  their  hands. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  263.  Supervisory  power  of  tax  commission 
and  comptroller.  The  tax  commission  shall  have 
general  supervisory  power  over  all  recording  officers 
in  respect  of  the  duties  imposed  by  this  article 
and  they  may  make  such  rules  and  regulations 
for  the  government  of  recording  officers  in  respect  to 
the  matters  provided  for  in  this  article  as  they  may 


46 


deem  proper,  provided  that  such  rules  and  regulations 
shall  not  be  inconsistent  with  this  or  any  other  statute. 
Whenever  a  duly  verified  application  for  a  refund  of 
mortgage  taxes,  erroneously  collected  by  a  recording 
officer,  is  made  to  the  tax  commission  it  shall  be  the 
duty  of  such  commission  to  determine  the  amount  that 
has  been  erroneously  collected  and  make  an  order  di- 
recting such  recording  officer  to  refund  the  amount  so 
determined  from  mortgage  tax  moneys  in  his  hands,  or 
which  shall  come  to  his  hands,  to  the  party  entitled  to 
receive  it  and  charge  such  amount  back  to  the  tax  dis- 
trict that  may  have  been  credited  with  the  same.  If 
any  recording  officer  shall  have  collected  and  paid  over 
to  the  treasurer  of  any  county,  a  tax  paid  upon  a  mort- 
gage which  under  the  provisions  of  section  two  hun- 
dred and  sixty  of  this  chapter  is  to  be  apportioned  by 
the  tax  commission  between  several  counties  before 
such  apportionment  has  been  made,  or  if  any  record- 
ing officer  shall  have  paid  over  to  such  treasurer  more 
money  than  required  on  account  of  mortgage  taxes  such 
recording  officer  shall  make  a  report  to  the  tax  commis- 
sion in  the  form  of  a  verified  statement  of  facts  and 
said  commission  shall  determine  the  method  of  adjust- 
ment and  issue  its  order  accordingly.  The  comptroller 
shall  have  general  supervisory  power  over  all  county 
treasurers  in  respect  to  the  duties  imposed  upon  them 
by  this  article,  and  may  make  such  rules  and  regula- 
tions, not  inconsistent  with  this  or  any  other  statute, 
for  the  government  of  said  county  treasurers   as  he 

47 


deems  proper  to  secure  a  due  accounting  for  all  taxes 
and  moneys  collected  or  received  pursuant  to  any  pro- 
vision of  this  article.  All  recording  officers  and  county 
treasurers  shall  furnish  such  bond,  conditioned  for  the 
faithful  and  diligent  discharge  of  the  duties  required 
of  them  respectively  by  this  article,  to  the  people  of  the 
state,  within  such  time,  with  such  sureties  and  in  such 
penal  amount,  not  exceeding  twenty-five  thousand  dol- 
lars, as  the  comptroller  may  prescribe.  The  provisions 
of  this  section  shall  cover  all  transactions  subsequent  to 
July  first,  nineteen  hundred  and  five. 

(As  amended  by  Laws  of  1916,  Chapter  336.) 

Sec.  264,     Tax   on   prior    advance    mortgages. 

Whenever  any  part  of  the  amount  of  the  principal 
indebtedness  which  is  or  under  any  contingency  may 
be  secured  by  a  mortgage  recorded  prior  to  July 
first,  nineteen  hundred  and  six,  is  advanced  after 
July  first,  nineteen  hundred  and  six,  the  tax  prescribed 
by  section  two  hundred  and  fifty-three  of  this  article  is 
hereby  imposed  on  the  amount  of  principal  indebted- 
ness so  advanced,  which  tax  shall  be  payable  at  the 
same  time  and  in  the  same  manner  as  taxes  imposed  by 
section  two  hundred  and  fifty-nine  of  this  article,  and 
all  the  provisions  of  section  two  hundred  and  fifty-nine 
in  relation  to  the  time  and  manner  of  paying  such  tax, 
the  filing  of  statements  in  relation  to  the  time  and 
amount  of  such  advances,  and  penalties  for  failure  to 
file  the  same  shall  apply  to  advances  made  under  this 

48 


section  and  the  payment  of  a  tax  thereon,  except  that 
if  the  mortgagor  is  not  a  corporation,  such  statements 
shall  be  filed  by  the  owner  of  the  mortgage,  who,  for 
failure  to  do  so,  shall  be  subject  to  the  penalties  pre- 
scribed by  such  section.  In  case  said  mortgage  was 
given  to  secure  the  payment  of  a  series  of  bonds,  the 
mortgagor  may,  at  the  time  of  paying  such  tax,  present 
to  the  recording  officer,  the  bonds  representing  the  por- 
tion of  the  principal  indebtedness  secured  by  said 
mortgage  upon  which  the  tax  is  to  be  paid,  and  also  file 
with  said  recording  officer  a  statement  verified  by  the 
mortgagor  or  an  officer  or  duly  authorized  agent  or  at- 
torney of  the  mortgagor  specifying  that  said  bonds,  so 
presented,  are  the  bonds  representing  that  portion  of 
the  principal  indebtedness  secured  by  said  mortgage 
upon  which  the  tax  is  to  be  paid  and  that  said  bonds 
are  secured  by  a  mortgage  recorded  in  said  office  stat- 
ing the  date  of  said  mortgage  and  the  liber  and  page  of 
the  record  of  the  same.  It  shall  be  the  duty  of  such 
recording  officer  to  indorse  upon  each  of  said  bonds,  so 
presented  to  him,  a  statement  signed  by  him  to  the 
effect  that  the  tax  imposed  by  this  article  on  that  por- 
tion of  the  principal  indebtedness  secured  by  said 
mortgage  represented  by  said  bonds  has  been  paid,  and 
said  statement  shall  be  conclusive  proof  of  such  pay- 
ment. Notwithstanding  the  exception  contained  in 
section  two  hundred  and  fifty-four,  the  record  owner 
of  any  mortgage  recorded  prior  to  July  first,  nineteen 
hundred  and  six,  other  than  a  corporate  trust  mort- 

49 


gage,  may  file  in  the  office  of  the  recording  officer  where 
such  mortgage  is  first  recorded  a  statement  in  form 
and  substance  as  required  by  section  two  hundred  and 
fifty-four  of  this  article,  except  that  it  shall  specify 
and  state  the  amount  of  all  advancements  made  there- 
on prior  to  said  date,  giving  the  date  and  amount  of 
each  advancement  and  the  amount  of  such  prior  ad- 
vancements remaining  unpaid,  and  thereby  elect  that 
the  same  be  taxed  under  this  article;  and  any  mort- 
gagor or  mortgagee  under  a  corporate  trust  mortgage 
given  to  secure  a  series  of  bonds  or  the  owner  of  any 
such  bond  or  bonds  secured  thereby  may  file  in  the 
office  of  the  recording  officer  where  such  mortgage  is 
first  recorded  a  statement  in  form  and  substance  as 
required  by  section  two  hundred  and  fifty-four  of  this 
article,  except  that  it  shall  specify  the  serial  number, 
the  date  and  amount  of  each  bond  and  otherwise  suffi- 
ciently describe  the  same  to  identify  it  as  being  secured 
by  such  mortgage,  and  thereby  elect  that  such  bond  or 
bonds  be  taxed  under  this  article,  and  such  bond  or 
bonds  shall  be  taxed  upon  the  whole  amount  thereof 
notwithstanding  the  provisions  of  section  two  hundred 
and  sixty  of  this  article.  A  tax  shall  thereupon,  in  the 
case  of  mortgages  other  than  corporate  trust 
mortgages,  be  computed,  levied  and  collected 
upon  the  amount  of  the  principal  debt  or  ob- 
ligation represented  by  said  unpaid  prior  advance- 
ments at  the  time  of  filing  such  statement,  or,  in  the 
case  of  a  corporate  trust  mortgage,  upon  the  amount  of 

50 


the  bond  or  bonds  specified  in  the  statement  filed,  at 
the  rate  prescribed  by  section  two  hundred  and  fifty- 
three  of  this  article.  Said  bonds  representing  prior  ad- 
vancements under  corporate  trust  mortgages  and  taxed 
as  herein  provided  may  be  presented  to  the  recording 
officer,  whose  duty  it  is  to  collect  said  tax,  for  indorse- 
ment and  he  shall  thereupon  indorse  upon  each  of  said 
bonds  a  statement,  attested  by  his  signature,  of  the  pay- 
ment of  the  tax  as  provided  in  this  section  in  respect 
to  bonds  representing  subsequent  advancements,  and 
the  record  owner  of  any  other  mortgage  taxed  upon 
prior  advancements  as  herein  provided  may  present 
said  mortgage  to  the  recording  officer  and  thereupon 
such  officer  shall  note  upon  the  same  the  filing  of  the 
statement  and  the  amount  of  the  tax  paid,  attested  by 
his  signature.  In  all  such  cases  the  recording  officer 
shall  note  on  the  margin  of  the  record  of  such  mort- 
gage the  filing  of  such  statement  and  the  amount  of  the 
tax  paid,  and,  in  case  of  bonds  secured  by  corporate 
trust  mortgages,  the  serial  number  of  each  such  bond. 
The  words  "bond"  and  "bonds"  as  used  in  this  section 
shall  be  deemed  to  embrace  all  notes  or  other  evidences 
of  indebtedness  secured  by  mortgages  taxable  under 
this  section.  In  case  of  any  mortgage  taxable  under 
this  section,  the  portion  of  the  indebtedness  secured 
thereby  upon  which  the  tax  imposed  by  this  section  is 
paid,  and  such  portion  only,  shall  be  exempt  from  taxa- 
tion under  the  provisions  of  section  two  hundred  and 
fifty-one  of  this  article.    Whenever  the  tax  imposed  by 

51 


section  two  hundred  and  sixty-four  of  this  article  as 
said  section  existed  prior  to  May  thirteenth,  nineteen 
hundred  and  seven,  has  been  paid  with  respect  to  any 
mortgage,  no  additional  tax  shall  accrue  on  such  mort- 
gage under  this  section  as  hereby  enacted  and  such 
mortgage  and  the  debt  or  obligation  secured  thereby, 
shall  continue  to  be  entitled  to  the  exemptions  and  im- 
munities conferred  by  this  article  and  all  of  the  pro- 
visions of  this  article  shall  remain  applicable  to  such 
mortgage.  All  taxes  imposed  by  or  which  became  due, 
payable  or  collectible  on  or  before  the  thirtieth  day  of 
June,  nineteen  hundred  and  six,  pursuant  to  chapter 
seven  hundred  and  twenty-nine  of  the  laws  of  nineteen 
hundred  and  five,  and  all  taxes  which  under  section 
two  hundred  and  fifty-eight  of  this  chapter  became  due 
and  payable  on  the  thirtieth  day  of  July  nineteen  hun- 
dred and  six  and  all  other  taxes,  if  any,  which  were 
imposed  by  chapter  seven  hundred  and  twenty-nine  of 
the  laws  of  nineteen  hundred  and  five  on  any  mortgage 
recorded  prior  to  the  first  day  of  July,  nineteen  hun- 
dred and  six,  in  respect  to  any  period  ending  on  or  be- 
fore the  first  day  of  July,  nineteen  hundred  and  six, 
shall  be  imposed,  become  due,  be  payable  and  collecti- 
ble and  shall  be  paid  over  and  distributed  in  the  same 
manner,  and  with  the  same  force  and  effect  as  if  this 
article  had  not  been  enacted;  and  for  the  purpose  of 
collecting,  paying  over,  distributing  and  enforcing  any 
such  taxes,  chapter  seven  hundred  and  twenty-nine  of 
the  laws  of  nineteen  hundred  and  five  shall  be  deemed 


52 


to  be  in  force,  and  the  lien  for  such  taxes  shall  attach 
and  such  taxes  shall  be  levied  and  collected  as  provided 
in  chapter  seven  hundred  and  twenty-nine  of  the  laws 
of  nineteen  hundred  and  five,  anything  herein  con- 
tained to  the  contrary  notwithstanding. 

(As  amended  by  Laws  of  1916,  Chapter  337.) 

Sec.  265.     Tax  a  lien;  exceptions. — The  tax  in 

this  article  imposed  shall  be  deemed  and  is  hereby 
declared  to  be  a  lien  upon  the  mortgage  upon 
which  such  tax  is  imposed  and  upon  the  debt  or  obli- 
gation secured  thereby,  except  that  upon  mortgages  re- 
corded prior  to  July  first,  nineteen  hundred  and  six, 
such  lien  shall  extend  only  to  that  portion  thereof  rep- 
resented by  the  amount  advanced  subsequently  to  such 
date  and  to  the  debt  or  obligation  secured  by  such  ad- 
vancement, and  for  the  purpose  of  enforcing  the  pay- 
ment of  the  tax  in  this  article  imposed,  such  mortgage 
and  the  debt  thereby  secured  shall  be  deemed  to  be 
property  within  this  state  notwithstanding  that  such 
mortgage  may  be  owned  by  or  be  in  the  possession  of  a 
person  or  corporation  outside  the  state,  and  a  copy 
thereof  duly  certified  by  the  recording  officer  of  any 
county  in  which  such  mortgage  is  recorded  shall,  for 
the  purpose  of  enforcing  the  payment  of  such  tax,  be 
deemed  to  be,  and  shall  have  the  same  force  and  effect 
as  the  original  mortgage  and  may  be  sold  to  satisfy 
such  tax  and  upon  a  sale  of  the  whole  or  any  part 
thereof,  shall  carry  with  it  and  transfer  to  the  pur- 
chaser all  the  rights,  interests  and  obligations  of  the 

53 


mortgagee  therein  named  or  his  assignee  or  successor  in 
interest  in  and  and  to  such  mortgage  and  the  debt  se- 
cured thereby,  or  the  part  thereof  to  which  such  lien 
attaches,  together  with  interest  and  costs. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  266.  Enforcement;  procedure. — In  case  the 
tax  imposed  by  this  article  is  not  paid  as  in 
this  article  provided,  the  tax  commission  may 
notify  the  attorney-general  of  such  failure  or 
refusal  to  pay  and  it  shall  then  be  the  duty  of  the 
attorney-general  to  enforce  the  payment  of  such  tax, 
and  for  that  purpose  he  may  maintain  an  action  in  the 
name  of  the  people  of  the  state  of  New  York,  in  any 
court  of  competent  jurisdiction,  either  to  sell  such 
mortgage;  or,  he  may  maintain  an  action  against  the 
mortgagee  or  his  assignee  or  successor  in  interest  per- 
sonally; or,  where  by  stipulations  contained  in  such 
mortgage  it  is  made  the  duty  of  the  mortgagor  to  pay 
such  tax,  then  against  the  mortgagor  or  his  successor  in 
interest  personally ;  or,  in  the  case  of  a  trust  mortgage 
against  the  trust  mortgagee,  personally;  or,  he  may 
pursue  either,  any  or  all  such  remedies.  All  actions 
instituted  by  the  attorney-general,  as  herein  provided, 
shall,  if  the  amount  involved  is  fifty  dollars  or  more, 
be  brought  in  the  county  of  Albany.  Where,  in  any 
action,  a  recovery  is  had  there  shall  be  added  to  the 
amount  of  such  tax  and  included  in  the  judgment,  in- 
terest at  the  rate  of  one  per  centum  per  month  on  the 

54 


amount  of  such  tax,  Ixrbe  ^compm^d 'from  the  date  on 
which  such  tax  became  due  and  payable,  except  that  in 
the  case  of  taxable  mortgages  heretofore  recorded  and 
upon  which  the  tax  imposed  by  this  article  has  not 
been  paid,  and  where,  in  such  case,  no  penalty  is  pre- 
scribed by  law  for  the  nonpayment  of  such  tax,  inter- 
est shall  be  added  at  the  rate  of  six  per  centum  per  an- 
num. In  any  action  brought  as  herein  provided,  where 
the  judgment  provides  for  the  sale  of  the  mortgage,  such 
judgment  shall  also  prescribe  the  time,  place  and  man- 
ner of  such  sale  and  of  the  notice  thereof  to  be  given, 
and,  in  the  discretion  of  the  court,  may  direct  that 
such  sale  be  made  by  or  under  the  direction  of  the 
comptroller  or  the  recording  officer  of  the  county  in 
which  such  mortgage  was  first  recorded,  and  all  money 
recovered  in  such  action  shall  be  paid  by  the  attorney- 
general  to  the  proper  recording  officer  in  satisfaction 
of  such  tax,  and  all  costs  recovered  therein  shall  be 
paid  into  the  state  treasury. 

(As  amended  by  Laws  of  1916,  Chapter  323.) 

Sec.  267.  Idem;  where  recovery  is  had  against 
trust  mortgagee. — In  every  case  where  recovery  is 
had  personally  against  a  trust  mortgagee  as  here- 
in provided,  and  payment  of  the  amount  recov- 
ered has  been  made  by  such  trust  mortgagee,  or  where 
such  trust  mortgagee  has  voluntarily  paid  such  tax,  he 
shall  be  deemed  to  have  and  possess  and  to  have  be- 
come subrogated  to  all  the  rights  and  interests  in  and 

55 


to  the  tax  lien  imposed  by  section  two  hundred  and 
sixty-five  hereof,  and  may  enforce  the  repayment  of 
any  such  sum  so  paid  by  him  with  interest  at  the  rate 
of  six  per  centum  per  annum  and  for  that  purpose  may 
maintain  an  action  in  his  own  name  in  any  court  in  the 
state  having  jurisdiction,  against  any  person,  associa- 
tion or  corporation  liable  to  pay  such  tax,  or  for  the 
sale  of  such  mortgage  and  the  debt  secured  thereby  to 
which  such  lien  attaches. 


56 


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